Overdraft is a credit limit authorized by the bank in a particular amount depending on the company’s financial position. Overdraft becomes available after signing the agreement. The company may reuse it for various purposes within the granted credit limit. The interest rate shall be paid only for the part of the credit limit you have spent.
- Possibility to use the company's current assets: for example, in order to purchase larger amount of goods or offer a wider range of services.
- Possibility to balance the cash flow: for example, you do not have to worry, that there will not be enough funds for the daily transactions.
- Opportunity to offer better terms for the customers: for example, to acquire goods or services with payment on open account.
- Extra funds within the amount authorized by the bank are available at any time.
- The interest rate shall be paid only for the part of the credit limit you have spent.
Nordea offers the companies to process the overdraft for up to 12 months period. The interest rate shall be paid only for the part of the credit limit you have spent.
The Provision is Required to Grant the Overdraft :
- The company owners' guarantee.
- Permanent cash flow in the company's account at Nordea.
- Real estate.
- Movable property.
The Following Criteria are Taken into Account when Granting the Overdraft:
- Company’s financial position.
- Liabilities at Nordea and other banks, such as leasing, long-term credit etc.
- The funding purpose.